(Bloomberg) — Gold rose from the lowest in more than two months as the dollar weakened, after the metal was pummeled by further signs of a strong economic recovery.

Bullion capped a five-day slide on Wednesday, the longest run of losses since March, as U.S. data showed retail sales and factory production surged more than expected in January, indicating the recovery was well under way. Demand for the haven was also hurt recently by a small revival in the dollar, amid expectations that more stimulus and a swifter Covid-19 vaccine rollout will see the American economy outperform its peers.

chart: Bullion rebounds from the lowest level in more than two months

© Bloomberg Bullion rebounds from the lowest level in more than two months

Gold, which posted its biggest annual gain in a decade last year, has dropped about 6% in 2021 amid optimism on growth. A gain in 10-year Treasury yields is weighing on demand for non-interest-bearing bullion, with the metal extending losses after forming a so-called death-cross pattern earlier this week.

Meanwhile, exchange-traded funds saw their biggest decrease in over a month on Wednesday, taking yearly outflows close to 1 million ounces. ETFs were crucial to gold’s rally to a record in August and sustained outflows could prove a major headwind to bullion’s performance.

Spot gold added 0.4% to $1,783.36 an ounce by 12:48 p.m. in London. On Wednesday, prices declined to the lowest since late November.

Jeffrey Gundlach, the veteran investor and chief executive officer of DoubleLine Capital LP, who has been neutral on gold for over six months, said in a Twitter post that Bitcoin may be benefiting from the waves of stimulus rather than bullion.

“Gold may stay on the defensive near term,” said James Steel, chief precious metals analyst at HSBC Securities (USA) Inc. Prices around “$1,800 may be turning into a firm resistance level. Much will depend on the U.S. dollar, which may be getting support from higher yields.”

In other metals, silver lost 0.6%, while platinum rose 1.1% and palladium was little changed. The Bloomberg Dollar Spot Index fell 0.3%.

Also on Wednesday, minutes from the Federal Open Market Committee’s January meeting showed that officials didn’t see the conditions for reducing their massive asset-purchase program being met for “some time.”

“The FOMC minutes were relaxed and of key importance to gold, so the likelihood of tapering seems far off,” said Steel. “While we are not positive in the very near term, gold may be nearing support.”

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